Softbank Chairman Masayoshi Son is reducing the amount of investment as China tightens regulations on the market, CNN reported on the 10th (local time).
The Chairman stated at a performance presentation that the company is to take a cautious approach until the impact of the new regulations becomes clear,.
As of the end of July, Chinese companies account for 23% of Softbank’s vision fund portfolio. However, since April, only 11 percent of the investment in vision funds has been directed to China.
Softbank faced difficult challenges in investing in China. And so the company have to be careful and careful said the chairman. If the outlook improves, they will invest again.
Recently, China launched a massive crackdown on privately owned companies. As a result, Chinese conglomerates are in a dilemma.
The first goal of Chinese regulators seems to be a rapidly developed technology company, but it has recently expanded to other industries such as private education.
Investors are in an awkward situation. So far, more than 1.2 trillion U.S. dollars in market value have evaporated, and the world’s second-largest economy is in fear of change.
Softbank, the world’s largest investor, owns shares in large Chinese companies such as e-commerce dinosaur Alibaba, car-sharing company Didi Chuxing and TikTok owned by Byte Dance.
In particular, Didi Chuxing has been going downhill since he was expelled from the App Store at the command of the Chinese government, failing to open IPOs in the U.S.
Chairman Son did not directly mention Didi Chuxing during the presentation, but said he had “good expectations” about Softbank’s portfolio of Chinese companies.
Chairman Son’s remarks came amid the announcement of Softbank’s 40 percent decline in profits. Net profit fell by 6.9 billion dollars in the second quarter from a year earlier.
However, at a time when we do not know how long the regulatory authorities will continue to crack down, he said, “Let’s wait and see what happens,” stressing, “We will resume active investment when the situation becomes clear.”
“There are still risks in China, but we can take risks,” Son said. “We do not support or oppose the Chinese government. We do not doubt China’s future potential.
